Fed's Barr Says Banks Should Be Cautious with Crypto Partners

Source: American Banker

Federal Reserve Vice Chair for Supervision Michael Barr wants banks to think twice about taking on deposits from crypto firms.

In a Wednesday afternoon speech, Barr said the volatility in the crypto field earlier this year demonstrated how interconnected the sector is. He urged banks to be aware of the "heightened liquidity risks" involved with doing business with crypto-related firms and their potential exposure to money laundering and fraud.

"Many of these activities pose novel risks," he said, "and it is important for banks to ensure that any crypto-asset-related activities they conduct are legally permissible and that banks have appropriate measures in place to manage those risks."